Universal faces music as Brussels orders EMI sell-off

London bankers were today looking forward to a big auction of record label EMI’s assets as its new owner, Universal Music, pays a “heavy price” to gain approval from Brussels for its £1.2 billion takeover.

The European Commission will spell out details of the concessions it has wrung from Universal when regulators give their formal approval in an announcement expected tomorrow. According to the Wall Street Journal, Universal must agree to sell 60% of EMI’s businesses in Europe, measured by revenue.

This will include the celebrated Parlophone label, home of Coldplay, the Gorillaz and Queen, and several other key subsidiaries such as Ensign and Mute, Virgin Classics and Chrysalis.

One person involved in the talks in Brussels was quoted as saying European approval “has come at a very heavy price for Universal”.

The source added: “The next question is whether they will recoup the losses on its disposals and whether they will go to a single buyer.” Lucian Grainge, chief executive of Universal Music, faces the difficult prospect of having to sell some labels to arch-rivals Warner or Sony, although private equity firms could also be keen.

Regulators have been examining the EMI takeover for nearly a year because Universal is already the world’s biggest music company.

EMI, whose other stars include Katy Perry, pictured, is fourth largest behind Sony and Warner — although in some markets EMI is third. Universal, which also still needs approval from several other key territories, including America, has 30% of the recorded music market, but argues it is not that dominant because it faces new digital rivals. Citigroup sold debt-stricken EMI last year, after seizing control from private equity boss Guy Hands.